CNX Midstream Partners (NYSE:CNXM) and Tallgrass Energy (NYSE:TGE) are both oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, earnings, analyst recommendations, valuation, dividends and institutional ownership.
CNX Midstream Partners pays an annual dividend of $1.34 per share and has a dividend yield of 7.1%. Tallgrass Energy pays an annual dividend of $1.99 per share and has a dividend yield of 8.5%. CNX Midstream Partners pays out 77.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Tallgrass Energy pays out 261.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Earnings & Valuation
This table compares CNX Midstream Partners and Tallgrass Energy’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|CNX Midstream Partners||$233.85 million||5.15||$114.99 million||$1.72||11.00|
|Tallgrass Energy||$655.90 million||10.06||-$128.72 million||$0.76||30.99|
CNX Midstream Partners has higher earnings, but lower revenue than Tallgrass Energy. CNX Midstream Partners is trading at a lower price-to-earnings ratio than Tallgrass Energy, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
CNX Midstream Partners has a beta of 1.7, indicating that its share price is 70% more volatile than the S&P 500. Comparatively, Tallgrass Energy has a beta of 1.91, indicating that its share price is 91% more volatile than the S&P 500.
This is a summary of current recommendations and price targets for CNX Midstream Partners and Tallgrass Energy, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|CNX Midstream Partners||0||2||5||0||2.71|
CNX Midstream Partners currently has a consensus target price of $24.00, suggesting a potential upside of 26.85%. Tallgrass Energy has a consensus target price of $26.83, suggesting a potential upside of 13.94%. Given CNX Midstream Partners’ stronger consensus rating and higher possible upside, research analysts clearly believe CNX Midstream Partners is more favorable than Tallgrass Energy.
This table compares CNX Midstream Partners and Tallgrass Energy’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|CNX Midstream Partners||46.16%||19.10%||12.51%|
Institutional & Insider Ownership
30.0% of CNX Midstream Partners shares are held by institutional investors. Comparatively, 23.4% of Tallgrass Energy shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
CNX Midstream Partners beats Tallgrass Energy on 10 of the 15 factors compared between the two stocks.
About CNX Midstream Partners
CNX Midstream Partners LP owns, operates, develops, and acquires natural gas gathering and other midstream energy assets in the Marcellus Shale and Utica Shale in Pennsylvania and West Virginia. As of December 31, 2017, the company operates 18 compression and dehydration facilities. It also operates condensate handling facilities with handling capacities of 2,500 Bbl/d each in Majorsville, Pennsylvania, as well as Moundsville, West Virginia that provide condensate gathering, collection, separation, and stabilization services. CNX Midstream GP LLC serves as a general partner of the company. The company was formerly known as CONE Midstream Partners LP and changed its name to CNX Midstream Partners LP in January 2018. CNX Midstream Partners LP was founded in 2014 and is based in Canonsburg, Pennsylvania.
About Tallgrass Energy
Tallgrass Energy, LP, through its interests in Tallgrass Equity, LLC, provides crude oil transportation services to customers in Wyoming, Colorado, and the surrounding regions of the United States. The company operates through three segments: Natural Gas Transportation; Crude Oil Transportation; and Gathering, Processing & Terminalling. It also provides natural gas transportation and storage services for customers in the Rocky Mountain, Midwest, and Appalachian regions; natural gas and crude oil gathering and processing services for customers in Wyoming; and natural gas liquids (NGLs) transportation services in Northeast Colorado and Wyoming. In addition, the company offers water business services, including freshwater transportation, and produced water gathering and disposal in Colorado, Texas, and Wyoming; crude oil storage and terminalling services in Colorado; and marketing services for NGLs and crude oil. The company was formerly known as Tallgrass Energy GP, LP and changed its name to Tallgrass Energy, LP in June 2018. Tallgrass Energy, LP was founded in 2013 and is based in Leawood, Kansas.
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